Shane Ross

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Worth Their Weight in Gold

Posted on: August 28th, 2011

I WAS never a natural convert to the ranks of the feminists. Certainly not during the time, two decades ago, that I was swallowing all the testosterone-tainted tales of the male-dominated financial world.

Yet the recent collapse in stock markets has prompted me to acknowledge that, when it comes to investment, testosterone is a curse.

Alpha males have been instruments of our downfall. The female of the species has a far better nose for the market dangers. She can scent a bubble a mile off. And she never lets the whiff of testosterone waft her away from reality.

During the four years of collapse in Irish assets — property and equities — I have only heard two people utter more than an ounce of sense. One is my mother, Ruth Isabel Ross, an author of gardening books, the other is my wife, Ruth Buchanan, a professional broadcaster.

Neither has a bull’s notion about derivatives, dividends or diversification. Neither has ever been exposed to the waffle of stockbroker-speak. Neither knows the meaning of leverage or even the history of Lehmans.

But I wish I had listened to them during the recent meltdown of global assets.

My missus and my mother long ago accepted the convention that the male of the species must manage the family finances. We males understand these things.

In my case, my missus deferred to me because I had bloated credentials. Was I not the chairman of two stockbroking firms in the past? Did I not sit on the board of investment companies? Was I not business editor of this newspaper? Ditto my mother, who comes from the school that regards matters of money as a little vulgar and beneath the dignity of properly educated women.

They were fooled by convention. While I am a well practised spoofer, my financial selections have frequently left a trail of self-destruction. When I was a stockbroker in the late Eighties I could have spoofed for Ireland. Innocent bystanders believed that I knew how to multiply their money.

Despite their deference, my wife and mother have been muttering in recent years.

They seem to have discovered internal bullshit detectors that went off at regular intervals. When the crisis began in 2007 my missus suggested a heresy. She wanted to invest a small monetary gift we had received in no less a commodity than gold bullion.

I tactfully dismissed her suggestion, explaining that gold was high risk, that we were cleverly invested in the wicked Bank of Ireland, the equally undesirable National Toll Roads and preference shares for dividend purposes.

I explained that gold was expensive to keep in the vaults and that it was already peaking at around $700 an ounce.

Last week the gold price briefly touched $1,900 an ounce, Bank of Ireland were virtually valueless, dividends were no more.

She has been tolerant of my bogus expertise — but from time to time (when I am pontificating) she mischievously enquires about the price of gold.

Such humiliation in my supposed area of speciality is bad enough from my wife, but more recently it has come from an even more unlikely quarter. A second bullshit detector has been buzzing.

My mother, well aware of the diminishing fortunes of those in equities, has been wondering out loud about the merits of the Swiss franc. She wanted to invest in the gnomes of Zurich. She knew the Swiss well from childhood experiences. They worked hard then, and they work hard now. They were dull, but safe.

Above all, they borrowed little. She hated the reckless borrowing of the Irish nation, warning that it would all end in disaster.

My mother’s words of wisdom went the same way as my wife’s. As a result we are all poorer. Not to mention the foolhardiness of ignoring her warnings about borrowing.

Gold has soared. Ditto the franc. So has Ireland’s unpaid debt.

Why in the name of God can the females of the species identify such rock solid investments and sense dangers, while insiders — often driven by testosterone — insist on ignoring them?

Among the most overloaded testosterone investors are our fund managers.

Last week I asked a senior pension fund source why Ireland’s pension fund managers had not invested in gold or in swiss francs. He explained that such investments were too risky. Ireland’s experts preferred less risky investments — like . . . er, equities, property and bonds!

The entire industry is indoctrinated. It still peddles the absurd mantra that ‘equities pay off in the long term’ — a slogan invented by banks and stockbrokers to win them more fees. Financial innocents followed this self-serving motto. The investment industry survived, the investors perished. Investment in strong currencies and solid gold were outside their orbit and control.

Investment managers — owned by banks — relentlessly bought shares in their parent companies. They picked stockbrokers controlled by the same parent bank, keeping commission in the family. The male gangs looked after each other. From time to time the brokers issued nonsensical circulars justifying their selections. A couple of female bullshit detectors would have blown them out of the water.

Despite the current debacle there is little sign of any upheaval in this mainly male empire. Discredited stockbrokers are still promising resurrections in share prices, resurrections that will not be seen before the second coming.

The guard has not changed. From top to bottom, the tight circle of macho men retain command.

A few months ago there was a chance of a breakthrough at the top. Department of Finance officials were reported as terrified that the new Government was set to appoint Joan Burton as Minister for Finance.

God forbid that such a talented woman, armed with her arsenal of bullshit detectors, would invade the Merrion Street fortress.

They need not have worried. The mandarins could always depend on the Labour Party to buttress the status quo. Joan, the obvious candidate for the Finance job, was shafted.

It could all have been different. Joan would never have allowed the recent government decision to pillage pensioners’ funds. Instead, she would have punished the pension manager insiders, rather than fleecing the pensioners.

The Government gave the finance portfolio to two male teachers, instead of to a trained accountant who had brilliantly shadowed the job in opposition. Joan might have even summoned the kings of the investment industry to ask how they were so rich while their clients were so poor? She might even have demanded why the pack had not listened to the female instincts that veered more to gold and Switzerland than to Irish shares.

While Joan may not yet be able to challenge Ireland’s world of financial testosterone, there is one woman flying the feminist flag in Europe’s corridors of finance.

On Thursday, German Chancellor Angela Merkel was named as Forbes magazine’s ‘Most Powerful Woman in the World’. Earlier in the week she had told the rest of Europe that Eurobonds were a non-runner. It took a woman of common sense to puncture the growing clamour for Eurobonds from other European leaders. Ms Merkel is set on a collision course with the stuffed shirts embedded in the European Commission.

Angela is stating the obvious: Eurobonds will mean Germany underwriting the entire debt burden of Europe. Only a woman can see that this is nonsense. We need more like Angela and Joan.